# Texas Sales and Use Tax Calculator for Manufacturing Purchases

> Source: https://netray.co/tools/texas-sales-and-use-tax-calculator-manufacturing
> Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems.
> Section: Free Tools

## Short answer

Estimate Texas sales tax on taxable purchases, use tax owed on items bought without tax, and the tax avoided on purchases that qualify for the manufacturing exemption.

## Category

regional

## Region

United States (Texas)

## Audience

- Controller
- Tax accountant
- ERP administrator

## Tool

**Kind:** calculator

**Currency:** $

**Inputs:**

#### Taxable purchases (tax charged by seller)

**Key:** taxable

**Type:** number

**Default:** 120000

**Min:** 0

**Step:** 1000

**Help:** Purchases that are taxable and on which the seller charges Texas sales tax.

#### Taxable purchases made without tax (use tax)

**Key:** untaxed

**Type:** number

**Default:** 45000

**Min:** 0

**Step:** 1000

**Help:** Taxable items bought from out-of-state sellers or others that did not charge Texas tax.

#### Purchases qualifying for the manufacturing exemption

**Key:** exempt

**Type:** number

**Default:** 350000

**Min:** 0

**Step:** 5000

**Help:** Machinery and items used directly in manufacturing, supported by an exemption certificate.

#### State rate

**Key:** state_rate

**Type:** number

**Default:** 6.25

**Min:** 0

**Max:** 10

**Step:** 0.01

**Unit:** %

**Help:** The Texas state sales and use tax rate is 6.25%.

#### Local rate

**Key:** local_rate

**Type:** slider

**Default:** 2

**Min:** 0

**Max:** 2

**Step:** 0.25

**Unit:** %

**Help:** Local taxing jurisdictions add up to 2%, for a combined maximum of 8.25%.

**Outputs:**

#### Combined rate

**Key:** combined

**Expr:** state_rate + local_rate

**Format:** decimal

**Description:** State plus local rate, in percent.

#### Tax paid to sellers

**Key:** tax_paid

**Expr:** taxable * combined / 100

**Format:** currency

#### Use tax you must self-report

**Key:** use_tax

**Expr:** untaxed * combined / 100

**Format:** currency

**Primary:** true

**Description:** Owed on taxable items bought without tax.

#### Tax avoided through exemption

**Key:** saved

**Expr:** exempt * combined / 100

**Format:** currency

**Primary:** true

**Description:** Tax you would have paid if the exempt purchases were taxed.

#### Total tax cost (paid plus use tax)

**Key:** total_tax

**Expr:** tax_paid + use_tax

**Format:** currency

**Chart:**

#### Tax avoided vs exempt purchases

**Type:** line

**X:** exempt

**From:** 0

**To:** 1000000

**Steps:** 20

**Series:**

- saved

**Disclaimer:** This estimate is for planning only and is not tax advice. Rates vary by location and eligibility depends on use. Confirm with the Texas Comptroller of Public Accounts or a tax professional.

## Content

**Intro:** Texas manufacturers need to know three numbers: sales tax paid on taxable purchases, use tax owed on items bought without tax, and tax avoided on purchases that qualify for the manufacturing exemption. This calculator gives all three from your purchase totals and rate.

**Sections:**

#### How to use the calculator

**Body:** Enter your taxable purchases where tax was charged, taxable items bought without Texas tax, and purchases you believe qualify for the manufacturing exemption. Set the state rate (6.25%) and your local rate, up to 2%, for a combined rate of up to 8.25%. The results show sales tax paid, use tax to self-report, and the tax avoided by exemption. The chart shows how exempt purchases scale the savings.

#### The manufacturing exemption in Texas

**Body:** Texas exempts tangible personal property that becomes an ingredient or component of a product for sale, and machinery, equipment and related items used directly in manufacturing, processing or fabricating tangible personal property for sale. To claim it, the purchaser gives the seller a properly completed Texas Sales and Use Tax Exemption Certificate, Form 01-339. Items used for general administration, such as office supplies, normally do not qualify, and the rules on what counts as used directly are detailed. Electricity and natural gas used in manufacturing have their own exemption rules, so check eligibility.

**Bullets:**

- Collect a signed certificate from you for each seller or use a blanket certificate
- Keep certificates and records for audits
- Do not apply the exemption to items outside the rules
- Review purchases of repair and replacement parts separately

#### Use tax and ERP tax code setup

**Body:** Use tax applies when you buy a taxable item without Texas tax, for example from an out-of-state seller, and it is owed at the same combined rate. In your ERP, create tax codes for taxable, exempt and use-tax-accrual purchases, tie them to item categories and vendor exemption status, and post use tax accruals from purchase invoices where tax was not charged. Store certificate expiry and vendor links so exempt purchases are traceable. Menus differ by system, so check your tax configuration documentation.

#### Common mistakes

**Body:** Frequent errors include treating everything bought for the plant as exempt, missing use tax on out-of-state online purchases, using the wrong local rate for the location of delivery, and failing to keep certificates. Run a periodic review of expense accounts with zero tax paid to catch missing accruals.

**Cta:** If tax coding and exemption certificates live in scattered files, Netray can build a private AI layer that checks purchase lines against your tax codes and certificates inside your own ERP environment.

**Faq:**

#### What is the Texas sales tax rate?

**Answer:** The Texas state rate is 6.25%. Cities, counties and special districts can add up to 2%, so the maximum combined rate is 8.25%. The rate depends on the location of the sale or delivery.

#### What form do I use for the manufacturing exemption in Texas?

**Answer:** Texas uses the Sales and Use Tax Exemption Certificate, Form 01-339. You complete it, state the exemption claimed and give it to the seller. Keep a copy for your records.

#### What is use tax and who pays it?

**Answer:** Use tax is the counterpart of sales tax on taxable items bought without Texas tax. The buyer self-assesses and reports it at the same combined rate, usually on the sales and use tax return.

#### Does this calculator replace tax advice?

**Answer:** No. It is an estimate based on your inputs. Eligibility and local rates should be confirmed with the Texas Comptroller or a qualified tax professional.

## Search terms

texas sales and use tax calculator, texas sales tax exemption form manufacturing, texas manufacturing exemption, texas use tax calculator, texas form 01-339, texas sales tax rate manufacturing

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